Typical Markup on Book
May 15, 2019 7:02 AM   Subscribe

Trying to figure out the minimum markup on a small book.

I belong to a large member-based organization and we have recently published a book for the benefit of the membership. This is an important book for our mission, and we would like everyone to have one. It's a small book that's 6 inches tall by 4 inches wide by one inch thick -- the point being that quite a few of these can fit on a storeroom shelf. We have offices and staff in Manhattan, although needless to say neither the offices nor the staff is dedicated only to warehousing and selling this particular book. There is a small storeroom for the various sales items, and the staff does other things besides selling books to members. We project selling multiple thousands of this book to the membership over the next decade.

What I'm trying to figure out is how we can arrive at a markup for these books that will cover a reasonable estimation of our associated costs (the usual things such as personnel, rent/heat/lighting and so on). We are not trying to make a profit on the books and there is some pressure to keep the price as low as possible as we cover the whole state of New York and economics are extremely varied. It's not feasible for us to do an extensive analysis to try to figure out our actual costs just as they apply to these books, and we just need a ballpark estimate so we aren't selling the books at a loss. We would be paying the cost to maintain the space and the salaries of the staff regardless of whether we were selling the book, but it makes sense to consider these expenses when figuring out a reasonable markup.

If we pay the printer sixteen bucks apiece for the books, we should charge . . . ? Or we should consider the following when figuring out how much to charge . . .
posted by slkinsey to Work & Money (5 answers total)
What things are actually going to cost more due to having these books in storage?

I would say that storage costs only factor into this if the books are taking up space that would otherwise be occupied by something else that brings in income.

If you have to increase the number of staff, or reduce their time spent doing other things, then there's a potential cost there. But if the staff have time to spare to package and send out x number of books a day, then effectively there's no additional cost their either.

However, if you're close to a point where the time or storage pressures on your organisation mean that you need more staff or more space, then you could consider the books to be part of the reason for that future cost, and preemptively try to cover that now.

I'd be inclined to just add up the cost of printing and delivery, and then add $2-3 just to make it a non-loss-making endeavour. Any small profit is going to support your organisation anyway.
posted by pipeski at 8:09 AM on May 15

Standard retail is a 2 markup, and retail is notorious for razor-thin margins. It wouldn't be unreasonable to sell this book for $32 (and that's only if your $16 includes freight from the printer). If you wanted to keep cost down, I'd put a ~20% discount to set a sell price of $26 plus shipping. Anything less than that you jeopardize losing money. Don't discount the cost of overhead and labor because people would be there doing things anyway - when they handle this book they are not doing other tasks.
posted by missmary6 at 8:22 AM on May 15 [2 favorites]

If you're trying to keep prices low but not lose money, you could offer volume pricing to minimize staff time spent dealing with orders. This works well if you have local affiliate groups, so, say, your Albany chapter can order a hundred or so and distribute. You could also have an option when ordering to for folks (students? seniors?) to inquire for discounted books if you're concerned everyone can't swing $35/book (having the full price a bit higher than you think you need will cover discounts).

Selling 200 books a year is easily 50+ hours of staff time including keeping shipping supplies in and dealing with payment problems, etc., and that's going to be the most expensive part, possibly even more than shipping depending on how much you can streamline your process. I'd pad the pricing a bit now so you don't have to increase it later.
posted by momus_window at 3:07 PM on May 15

Consider print on demand: you don't have to store the books, or ship the books. The unit cost might be higher, but the impact on your office and staff will be much lower.

I'd also be surprised if many of your members wouldn't prefer an ebook of some sort.
posted by scruss at 4:48 PM on May 15 [1 favorite]

If your printer is charging you $16 per copy for an inch-thick (about 300 pages?) 6" x 4" book, then either you've got some very fancy paper or binding, or you are being severely bilked.
posted by Hogshead at 3:54 AM on May 17

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